Unacademy will transition offline centers to franchise models by April
Cash burn was reduced by 55% in CY2024, falling from ₹450cr to ₹200cr
Airlearn scaled 15x in revenue, growing from $200,000 to $3 million ARR in 2025
Unacademy will shut its company-operated offline centres and convert them into franchise partnerships over the next few months, with the transition expected to be completed by April, co-founder and CEO Gaurav Munjal told employees.
The move marks a strategic pivot away from capital-intensive brick-and-mortar operations back to an online-first model, with local partners handling day-to-day centre operations while Unacademy retains control over academics, curriculum, technology and brand.
1 January 2026
Get the latest issue of Outlook Business
“Over the coming months, we will exit our company-operated centre business by converting these into franchise partnerships,” Munjal wrote, adding that the model has already proven it can work. He said the franchise model has already been tested and is more asset-light and capital-efficient, allowing the company to focus investment on scalable digital products rather than physical infrastructure.
Pivot Rationale
The shift follows a broader cost-restructuring effort in which Unacademy cut test-prep cash burn from about ₹450 crore in 2024 to roughly ₹200 crore, exited non-performing initiatives, and improved unit economics across several verticals, including UPSC, NEET-PG and CAT.
He highlighted that multiple businesses are now contribution-margin positive, while PrepLadder and Graphy were cash-flow positive for the full year. Language-learning venture Airlearn was cited as a growth example, scaling from around $200,000 in ARR at the start of 2025 to nearly $3 million by year-end. Unacademy also holds about ₹1,100 crore in cash, which Munjal said provides sufficient runway to complete the offline transition and push growth in 2026.
Munjal stressed that the next phase would prioritise growth over survival. “CY 2026 is not about survival. It is about growth,” he wrote, citing the compounding momentum in online test-prep businesses and Airlearn’s growing international traction.
Operational Expectations
Operationally, franchising is expected to reduce fixed costs, simplify operations and improve free cash flow, though it shifts execution risk to local partners.
Maintaining quality, consistency and brand trust will depend on strong partner selection, clear operating playbooks and robust oversight. For investors, the move signals a sharper focus on capital efficiency and margin recovery, with management positioning the company for growth rather than survival in the next phase.
